Bond duration is a measurement that tells us how much a bond’s price might change if interest rates fluctuate. Its full definition is actually a little more technical than that since duration ...

Modified duration is a formula that measures the sensitivity of the valuation change of a security ... rates increase by 1%, the price of our hypothetical three-year bond will decrease by 2. ...

The formula is as follows: The opposite is true of low convexity bonds, whose prices don't fluctuate as much when interest rates change. When graphed on a two-dimensional plot, this relationship ...

Bonds can help diversify your portfolio, but they are not risk-free. Understanding the relationship between yield and price is key to getting the most from the bonds in your portfolio. Find out ...